This is not financial advice
As demand from Splinterlands creates its market effect, there is the FOMO factor that kicks in and creates this spike phenomena where as the price gets higher, people get excited and buys at an even higher price until those who like to buy high and sell low get low on or run out of gambling reserves and are unable to push the price higher. Then you have people with Hive who bought in and are no longer seeing a high price value for what they bought. This is when they start selling.
My idea is to try to distill the price action due to actual demand for Hive from people buying Hive for reasons other than speculating on its price. I've seen it again and again but with BTC. There is a demand event (Splinterlands), this causes demand not related to its current price. The market needs to rediscover the new price based on the new demand. The supply for Hive has also gone down slightly. In the case of Bitcoin, there was little demand except for those who wanted technology. Then the libertarians who hated using dollars and banks started using it. Then it was the drug dealers and users, and then the merchant adoption... These were slow demand rises for Bitcoin.
When the Silk Road website gained popularity, Bitcoin suddenly had demand. People who didn't care about the technology and still liked to use dollars suddenly wanted Bitcoin. We saw a big push of Bitcoin to $30 / coin (April 2011). I didn't know about it at the time, but three months prior the Silk Road Marketplace website was launched. Like it or not, this website gave Bitcoin demand. This demand event, forced the market to rediscover the Bitcoin to USD price. As demand came people bought and short term speculators bought in thinking they could make a fast buy and sell. It got to $30 and then they ran out of short term speculator money to keep buying it up. The short term speculators after finding nobody was going to buy the coins for $50/coin, sold after the peak came down. For years people would feel sorry for those who bought Bitcoin at $30/coin. Sorry for those who bought Bitcoin at $30 a coin!
The next big demand event, was really a demand event on the fiat monetary system as a whole. The Cypress government couldn't bail out their central bank. So, they decided they would bail in. They would tax depositors so they could bail out the bank. This happened in 2013. Now, the phrase safe as a bank suddenly became an ironic phrase. The price of Bitcoin had settled down and was rising back up at the time due to demand from market adoption, Libertarians and those interested in the technology. We had adjusted and it became our new money for many. But for those who knew how to self-custody, saw that leaving their money in their own bank account was risky. So after this demand event the price rose and peaked at over $1,100 USD! Mmm.... now that's gravy! It went down to $450 a coin and up and down again. It started to lower in price. This was just part of price discovery. It settled down to $230 and saw so many stories of how it crashed. What about the people who bought in before the Bailin? Do you think these guys were sorry they bought in at $7 and saw the bitcoin they held was at $210?
As mentioned earlier, it was a reverse-demand event for fiat money. Bitcoin didn't really go up in its demand, the demand for the dollar went down. As people forget, they will use bank accounts again and so history could repeat itself and we will see another bailin. Perhaps in a country where it had not happened before.
In 2017, we had the reverse-demand event for Bitcoin. As the blocks filled up and the fees went from low to high. Suddenly merchant adoption went in reverse. Companies that had been accepting Bitcoin stopped. Scaling of Bitcoin users went from Bitcoin to other currencies. Currencies that have lower fees had an opportunity to get the market share. This dynamic is still here today.
The latest demand events with hedge fund adoption and legal tender adoption in El Salvador, we see Bitcoin trading at five times of what its value was before the scamdemic. We see it again and again a sudden jagged peak up and then movement downward when market participants recover from the price hysteria of the buy high mentality but the price will be significantly higher than where it was before the demand event happened.
I don't even look at the prices daily but over time, I see there is a sudden rise a crash and recovery. I've sold Hive into my favorite stable coin HBD. I'm earning interest and should Hive come down close to or below my predicted price, I could decide to buy for the next Splinterlands.
